Cambodia Investment Review
An independent impact assessment study commissioned by the Cambodia Microfinance Association (CMA) and executed by M-CRIL, has shed light on the central role of Cambodia’s microfinance sector in steering the Kingdom towards achieving its Sustainable Development Goals (SDGs). The comprehensive study, drawing data from over 3,200 microfinance clients across 10 provinces and more than 450 villages, paints a vivid picture of the sector’s profound impact on the socio-economic framework of Cambodia.
The report was commissioned against the substantial growth and contributions of Cambodian Microfinance Institutions since 2001 but also addresses global concerns. Amid adverse international reports accusing Cambodian MFIs of stress, indiscriminate lending, and coercive practices leading to severe consequences for borrowers, this study aims to clarify these perceptions, offering a deeper understanding and shedding light on the actual impact of microfinance in the nation. The CMA’s commitment to regular future assessments signifies a step towards transparency and ongoing improvement in the sector.
Microfinance In Uplifting Low-Income Households
The findings of the study are a testament to the sector’s significant contribution, particularly in uplifting low-income households, thereby bolstering Cambodia’s economic growth. A noteworthy 67% of the sample size reported positive life changes, with 31% attributing substantial economic benefits and life enhancements to the microfinance services availed. Another 36% acknowledged noticeable improvements over the past five years.
Mr. Sok Voeun, the Chairman of the CMA, reflected on the findings, stating, “The transformative impact of the microfinance sector is not confined to economic upliftment alone; it is intricately woven into the very social fabric of Cambodia. This study not only reasserts the sector’s instrumental role in fostering economic empowerment but also underscores our commitment at the CMA to harness these insights for continually magnifying the sector’s positive societal contributions.”
The study also highlighted the sector’s pivotal role in advancing key Sustainable Development Goals:
- SDG 1 (No Poverty): A significant 58.6% of the participants found microfinance services accessible, with a substantial 67% reporting significant life improvements, marking a pivotal stride in poverty reduction.
- SDG 2 (Zero Hunger): Notable life improvements, particularly among the poor and vulnerable, have significantly contributed to reducing hunger, with only 0.8% of the respondents experiencing temporary food shortages.
- SDG 3 (Good Health and Well-being): A majority (67%) noted enhancements in their quality of life, indicating a positive trajectory towards overall well-being.
- SDG 5 (Gender Equality): Microfinance has notably contributed to gender equality, with a higher percentage of female borrowers (46%) compared to males (41%), although challenges in women’s empowerment and financial autonomy were acknowledged.
- SDG 8 (Decent Work and Economic Growth): Entrepreneurs, both female and male, reported utilizing microfinance for business growth, resonating with the essence of SDG 8.
- SDG 10 (Reduced Inequalities): For the 31% who reported substantial life improvements, there’s an evident correlation with reduced inequalities, aligning with the zero-poverty ambition of SDG 1.
- SDGs 11 and 12 (Sustainable Cities and Communities, Responsible Consumption and Production): While these goals generally apply at a macro level, the report acknowledges the microfinance sector’s role in promoting responsible financial behaviors and contributing to sustainable economic progress.
This comprehensive report positions the microfinance sector as a dynamic catalyst for positive change, aligning seamlessly with various SDGs and nurturing inclusive growth within Cambodia. It also underscores the imperative for continued collaboration and dedication towards cultivating a more resilient and sustainable financial ecosystem.
